Fresh Austerity Measures Will Weigh On An Already Troubled Greek
The Greek parliament had to be defended by armed police this past weekend, as lawmakers gathered to discuss – and ultimately to approve – a controversial package of fresh austerity measures. While two-thirds of those parliamentarians who cast ballots (some abstained) voted in favor of the measure, some economists believe that greater austerity isn’t going to give the Greek economy much of a boost.
After all, as can be seen clearly on this week’s Chart of the Week (below), the Greek economy appears about as far as possible from being on the road to recovery. On the contrary, it’s now in the fifth year of a horrific recession, one that has sent unemployment soaring to nearly 21%, and seen industrial production – after apparently coming close to flattening out at “normal” levels early last year – resume posting double-digit declines.
That said, the Greek government was caught in a bind. With 14.5 billion euros of government bonds falling due in a month’s time, the new austerity measures were the price of a 130-billion-euro bailout sponsored by eurozone governments along with the International Monetary Fund. The new legislation staves off a disorderly national default and probable bankruptcy – at least for the time being. With a fresh round of elections likely to take place in April, and austerity measures seemingly prolonging and deepening Greece’s economic crisis, the long-term outlook for the nation remains very uncertain – at best.
Check back next week, when Alpha Now will offer you a new chart illustrating an economic theme that is making news and driving financial markets. In the meantime, for more charts illustrating the depth of Greece’s economic woes, you can refer back to this article that summarized the country’s plight.
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